November 5, 2010

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IMPORTANT NOTICE TO WEBSITE AND VEI USERS

We are Changing our Stock Sector and Industry Group Designations
In an effort to bring our Sector and Industry designations in line with standard
financial industry assignments, we have partnered with Zacks Investment Research, a
world leader in fundamental financial data. Effective Monday, November 8th, our
stocks will be classified as part of 16 overall sectors with 289 individual industry groups.
Currently, our sector valuation table looks like so:
Last 12-M P/E
Sector Change MTD YTD Valuation
Return Ratio
Basic Industries 0.13% 1.54% 26.24% 11.07% overvalued 47.85% 25.57
Capital Goods 0.06% 1.96% 23.13% 0.19% overvalued 23.28% 21.77
Consumer Durables -0.19% 1.50% 17.79% 4.23% undervalued 33.83% 20.49
Consumer Non-Durables -0.03% 1.08% 11.98% 0.75% overvalued 24.28% 17.20
Consumer Services 0.18% 1.85% 17.16% 2.94% undervalued 22.96% 21.44
Energy 0.57% 2.10% 10.70% 11.64% overvalued 33.00% 26.22
Finance 0.34% 1.27% 13.96% 3.70% undervalued 13.70% 18.13
Health Care -0.07% 1.18% 23.37% 8.68% undervalued 12.50% 20.77
Public Utilities 0.01% 1.12% 3.22% 4.59% overvalued 19.62% 20.21
Technology 0.12% 1.40% 24.15% 0.86% undervalued 34.36% 25.41
Transportation 0.61% 1.82% 22.67% 3.51% overvalued 34.43% 20.06
 After the change it will look like this*:
Last 12-M P/E
Sector Change MTD YTD Valuation
Return Ratio
Aerospace 0.13% 1.54% 26.24% 11.07% overvalued 47.85% 25.57
Auto-Tires-Trucks 0.06% 1.96% 23.13% 0.19% overvalued 23.28% 21.77
Basic Materials -0.19% 1.50% 17.79% 4.23% undervalued 33.83% 20.49
Business Services -0.03% 1.08% 11.98% 0.75% overvalued 24.28% 17.20
Computer and Technology 0.18% 1.85% 17.16% 2.94% undervalued 22.96% 21.44
Construction 0.57% 2.10% 10.70% 11.64% overvalued 33.00% 26.22
Consumer Discretionary 0.34% 1.27% 13.96% 3.70% undervalued 13.70% 18.13
Consumer Staples -0.07% 1.18% 23.37% 8.68% undervalued 12.50% 20.77
Finance 0.01% 1.12% 3.22% 4.59% overvalued 19.62% 20.21
Industrial Products 0.12% 1.40% 24.15% 0.86% undervalued 34.36% 25.41
Medical 0.61% 1.82% 22.67% 3.51% overvalued 34.43% 20.06
Multi-Sector Conglomerates 0.13% 1.54% 26.24% 11.07% overvalued 47.85% 25.57
Oils-Energy 0.06% 1.96% 23.13% 0.19% overvalued 23.28% 21.77
Retail-Wholesale -0.19% 1.50% 17.79% 4.23% undervalued 33.83% 20.49
Transportation -0.03% 1.08% 11.98% 0.75% overvalued 24.28% 17.20
Utilities 0.18% 1.85% 17.16% 2.94% undervalued 22.96% 21.44
*NOTE, All table data for illustration purposes only

This change should make our valuation, forecast, and ratings data more useful
as the sector and industry groupings will be more akin to similar designations found on
Bloomberg and other financial data providers.
In addition, with far more industry group sub-categories, comparisons between
stocks will be more nuanced and useful For example it will now be possible to search
for banks based on geographical location like "east," "midwest" etc. and search
Mining stocks by individual commodities such as "gold," silver," non-ferrous," etc.
When we implement this change, you may notice a change in the number of
stocks in a given sector or industry group as well as some fluctuations in certain
datapoints--such as sector and industry valuations, performance, and ratings data.
We hope to keep any disruption in service to a minimum and provide all of our
clients with a seamless conversion. We appreciate your patience and understanding
as we complete this process.
ValuEngine Institutional (VEI) subscribers will need to re-download and re-install
their software to implement the new changes. To begin the upgrade process, users
should go to "Help" and select "Product Key" in their software and write down their
activation code. Then, on November 8th or later, users should go HERE to download
the latest edition of the software. Run the install, re-enter the product key, and
update the Daily and then the Monthly databases.
 Website users should notice the change as of November 8th. Website users will
not need to make any changes to their use of the website but may find changes in
sector and industry figures as noted above as well as some differences in a given
stock's comparables.
If you have any questions about our new sector and industry group
designations or the re-installation of your software and product code, please don't
hesitate to contact us at support@valuengine.com or (800) 381-5576

Bonus for Readers

--Free Individual Stock Report for Weekly Newsletter
Subscribers
As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE
DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.
This week's free download is our report on EXACT SCIENCES (EXAS.) The stock is
currently a big gainer for our ValuEngine Forecast 22 Market Neutral Strategy. Since
our last rebalance on October 15th, EXACT SCIENCES--a short pick--has seen a share
price decline of almost 30%. Shares were down despite some good news for the
company's colorectal screening test as well as the announcement that they received
a grant from the US Federal Government to further support the research program. The
stock had shown strong momentum over the past 6 months and thus the model was
quite astute in timing the short call.
ValuEngine has issued a HOLD recommendation for EXACT SCIENCES for the
longer term because the one-year forecast target price remains in positive
territory. However, it ranks near the bottom of our database in terms of composite
score, fair value, p/e ratio, and the one year target price.
Based on the information we have gathered and our resulting research, we feel
that EXACT SCIENCES has the probability to ROUGHLY MATCH average market
performance for the next year. The company exhibits ATTRACTIVE momentum and 5-
year annualized return, but UNATTRACTIVE expected EPS growth.
As of today, we believe that EXACT SCIENCES should be trading at $3.34. This
makes EXACT SCIENCES 82.86% overvalued. Fair Value indicates what we believe the
stock should be trading at today if the stock market were perfectly efficient and
everything traded at its true worth. For EXACT SCIENCES, we base this on actual
earnings per share (EPS) for the previous four quarters of -$0.25, forecasted EPS for the
next four quarters of -$0.48, and correlations to the 30- year Treasury bond yield of
3.92%.
 EXACT SCIENCES uses applied genomics to develop screening technologies for
use in the detection of cancer. Certain of its technologies have been licensed to
Laboratory Corporation of America Holdings for a stool-based DNA screening assay
for colorectal cancer in the average-risk population.
Weekly Subscribers can download a FREE Detailed Valuation Report on EXAS HERE.
If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed
Valuation Report, you can subscribe to our Free Weekly Newsletter HERE.
MARKET OVERVIEW
Index started week Thursday Close 4 day change 4 day change % ytd
DJIA 11120.3 11434.84 314.54 2.83% 9.57%
NASDAQ 2520.45 2577.34 56.89 2.26% 13.56%
RUSSELL 2000 706.13 733.46 27.33 3.87% 15.98%
S&P 500 1185.71 1221.06 35.35 2.98% 9.72%

Summary of VE Stock Universe

Stocks Undervalued 48.76%
Stocks Overvalued 51.24%
Stocks Undervalued by 20% 23.27%
Stocks Overvalued by 20% 22.04%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E Ratio
MReturn
Basic Industries 2.78% 4.55% 30.42% 14.61% overvalued 51.92% 26.34
Capital Goods 2.10% 5.17% 27.09% 2.94% overvalued 27.71% 22.48
Consumer Durables 2.20% 3.89% 20.48% 1.81% undervalued 37.29% 21.02
Consumer Non-Durables 1.67% 2.89% 13.85% 1.04% overvalued 26.72% 17.48
Consumer Services 1.39% 3.43% 18.97% 1.43% undervalued 24.77% 21.77
Energy 2.19% 4.48% 13.29% 14.02% overvalued 35.46% 26.8
Finance 1.57% 3.03% 16.02% 1.43% undervalued 17.26% 18.53
Health Care 1.27% 2.63% 25.87% 7.40% undervalued 15.12% 21.09
Public Utilities 1.45% 2.66% 4.69% 4.40% overvalued 20.86% 20.4
Technology 1.26% 2.84% 26.01% 0.70% overvalued 35.76% 25.78
Transportation 0.69% 2.64% 23.59% 4.48% overvalued 36.09% 20.25
Foreign Stock Talk—ADRs
Below, we present various top-five lists for the for the more than 400 ADRs we
cover from our Institutional software package (VEI).

Top-Five ADRs--Short-Term Forecast Returns

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
VE VEOLIA ENVIRON 30.15 N/A -8.25
SATYAM COMPUTER
SAY 3.75 N/A -40.1
SERVICES LTD
LDK LDK SOLAR CO 12.89 -31.85 131.42
JASO JA SOLAR HOLDGS 9.23 -31.4 136.06
DGW DOUYUAN GLOBAL 13.14 -40.31 -64.11

Top-Five ADRs--Long-Term Forecast Returns

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
LDK LDK SOLAR CO 12.89 -31.85 131.42
BP BP PLC 43.91 -26.43 -20.16
JASO JA SOLAR HOLDGS 9.23 -31.4 136.06
SATYAM COMPUTER
SAY 3.75 N/A -40.1
SERVICES LTD
TOT TOTAL FINA SA 57.65 -5.79 -0.55

Top-Five ADRs--Composite Score

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
JASO JA SOLAR HOLDGS 9.23 -31.4 136.06
SOLF SOLARFUN POWER 10.64 -28.35 120.29
LDK LDK SOLAR CO 12.89 -31.85 131.42
TEO TELECOM ARGENTI 25.6 -11.01 54.4
BFR BANCO FRANC-ADR 13.61 1.17 128.74
Top-Five ADRs--Most Overvalued

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
ARMH ARM HOLDNGS ADR 16.66 122.64 127.93
GGAL GRUPO GALIC ADR 16.24 107.11 181.46
VIT VANCEINFO TECH 37.68 65.5 129.9
RDY DOCTOR REDDYS 39.81 61.02 76.85
SQM SOC QUIMICA MIN 52.55 58.71 43.27

VE Premium Website Stock Analysis subscribers can find complete valuation,

forecast, and ratings data on every individual equity in our universe of more than
5,500 equities HERE.

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Suttmeier Says
--Commentary and Analysis from Chief Market Strategist
Richard Suttmeier
If you have any comments or questions, send them to Rsuttmeier@Gmail.com

Treasury Yields

10-Year-- (2.487) Daily, annual and annual value levels are 2.660,
2.813 and 2.999 with monthly, quarterly and semiannual risky
levels at 2.380, 2.265 and 2.249. I still project that the decline in the
10-Year yield will be limited to my quarterly and semiannual risky
levels at 2.265 and 2.249.

Commodities and Forex

Comex Gold--($1325.5) Quarterly, semiannual and annual value levels are $1306.4,
$1260.8, $1218.7 and $1115.2 with my monthly pivot at $1343.7, and daily and weekly
risky levels at $1351.4 and $1373.6. Gold failed to hold my monthly pivot at $1343.7.

Nymex Crude--($1391.3) Quarterly, semiannual and annual value levels are $1306.4,
$1260.8, $1218.7 and $1115.2 with my monthly pivot at $1373.0, and weekly risky level
at $1396.7. The rise in Gold extended the parabolic towards this week’s risky level at
$1396.7.

The Euro--(1.4213) Daily, quarterly and monthly value levels are 1.4019, 1.3318 and
$1.2709 with weekly and semiannual risky levels at 1.4371 and 1.4733. The euro is
trading at a new high for the move with this week’s risky level at 1.4371.

Major Indices

The Dow--(11,435) Monthly, semiannual, annual and quarterly value levels are 10,848,
10,558, 10,379 and 8,523 with daily, annual, semiannual and weekly pivots at 11,263,
11,235, 11,296 and 11,374. I show no risky levels following the Dow Theory Buy Signal.
 The Dow Theory Buy Signal is the technical reason for Dow 11,434.84. I noted the
following in our free weekly on October 22nd,

a Dow Theory Buy Signal occurs with Dow Transports closing above its May 3rd closing high at
4,806.1, and the Dow Industrials closing above its April 26th closing high at 11,205.03. The Dow
Industrials traded above 11,205.03 on Thursday, but did not close above that milestone. The
Dow Transports lagged well behind 4,806.1 blocked by weekly and monthly risky levels at 4779
and 4797.

This week, we saw the markets reach the levels necessary to confirm a Dow
Theory buy signal. Dow Theory holds that economic action can be tracked via a
Transportation index in order to garner clues about the overall productivity of the
economy and thus a larger stock index--for more on Dow Theory go HERE.

A Dow Theory Buy Signal is a late cycle signal that typically occurs after about
two thirds of the rally has already occurred. The signal fortifies the notion that the
market is in a "Buy Weakness" mode. As I promote in my ValuTrader Portfolio with my
"Buy and Trade" strategy, you want to buy on dips/weakness.

Remember that in my view the notion of "buy and hold" is dead these
days. You need to be aware of the trading ranges for the markets and move
accordingly. While I may hold a long-term perspective that we will see Dow 8500
before we see 11500 again, this does not mean you sit on the sidelines holding 100%
cash.

This means you "buy and trade" to book profits as any given equity moves within
my specified technical levels. For longs, you buy at value levels and sell at risky levels
and for shorts, you sell at value levels and buy at risky levels.

For the Dow, we know we have semiannual and annual pivots at 11,296 and
11,235. Below these levels are monthly, semiannual and annual value levels at 10,848,
10,558 and 10,379. Now that we are operating in a Dow Theory Buy mode, you want
to buy on weakness.

This is the opposite of what we saw the last time we had a Dow Theory-based
signal--which was in November, 2007. At that time, we structured our strategy the
opposite direction, we sold on strength. At that time, my macro-call was correct. We
saw some gains in the markets, but within a few months the real carnage began.
Thoughts on QEII

The Fed decision to buy $75 billion in longer-dated US Treasuries in each of the
next eight months will total $600 billion by the end of June 2011. This policy helps Wall
Street make money on commodity speculation and staying short the dollar, while
Main Street USA struggles with the higher cost of living resulting from higher energy
and food costs. The Fed says there is no inflation which is hogwash! Just observe the
rising Prices Paid components of the latest ISM readings.

The Fed Chairman says he wants higher stock prices and instead of giving
retirees a money market rate they can live with. The Fed wants folks living on a fixed
income to take more investment risks. Many on Main Street lost a bundle on the Fed-
induced bubbles of the new millennium. First was the Tech Bubble in 2000, then the
Housing Bubble in 2006, which continues today, and the stock market crash of
October 2007 to March 2009. Now we have a gold bubble and an overvalued stock
market. If Americans were allowed to vote on Fed policy the vote would have been
against QEII.

Now, we are re-inflating the commodities bubbles as Gold pushes towards a

new all time high and as Crude Oil breaks out to the upside. Please tell me how this
helps Main Street USA where jobs are supposed to be created? Complicating the
Main Street problems are rising home foreclosures, fewer hours worked in addition to
higher real inflation. Americans are being forced into a scenario of accepting a lower
standard of living, while the fat cats on Wall Street get a QE2 license to speculate.
With all of the bailouts that have cost tax payer billions, nothing has been done to
help end the cause of “The Great Credit Crunch”, which is the weakening housing
market. This is the foundation that must be fixed before the US economy has a
chance to create jobs and grow again.

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 Consider the following results:
Invidia Corp (NVDA) 12% in One Week
Whitney Holdings (WTNY) 12.5% in Two Weeks
Fedex (FDX) 20% in 25 days
General Electric (GE) 14.5% in 25 days
Symantec (SYMC) 13% in One Week

With both long selections and short ETFs to manage risk, ValuTrader subscribers
are positioned according to Suttmeier's read of the markets. ValuTrader subscribers
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critical technical levels for his portfolio of stocks and popular index ETFs as well as
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occur.
Since inception, Richard Suttmeier's ValuTrader Newsletter Portfolio has
provided a return of more than 33.6 % vs the S&P 500's return of 25.8%

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